Talking Points:
- EUR/USD Holds Range Despite Waning German Business Confidence- Greece Remains in Focus.
- GBP/USD Continues to Trade Above Former-Resistance Ahead of BoE Testimony.
- USDOLLAR Threatens Bearish RSI Momentum Ahead of Fed Chair Yellen Testimony.
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Chart - Created Using FXCM Marketscope 2.0
- Despite the dismal data prints coming out of the euro-area, EUR/USD may continue to hold near-term support around the 1.1300 handle as Greece moves towards a bailout extension.
- Limited risk for a euro-area breakup may generate a relief rally in EUR/USD, but will retain a bearish outlook as long as Relative Strength Index (RSI) preserves the bearish trend from back in 2013.
- DailyFX Speculative Sentiment Index (SSI) shows retail crowd remains net-short EUR/USD, but looks as though FX traders are scaling back their bearish bets on the euro-dollar as the ratio continues to narrow, with the figure currently standing at -1.15.
GBP/USD
- Despite the failure to retain the bullish RSI momentum, GBP/USD may face a larger advance going into March as it continue to hold above former resistance around 1.5300 (23.6% retracement) to 1.5320 (78.6% retracement).
- With the Bank of England (BoE) scheduled to testify on its Inflation report on February 24, may see the fresh batch of central bank rhetoric heighten the appeal of the sterling should Governor Mark Carney continue to prepare U.K. households and businesses for higher borrowing-costs.
- Next topside region of interest comes in around 1.5500-15, the former support region.
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USDOLLAR(Ticker: USDollar):
| Index | Last | High | Low | Daily Change (%) | Daily Range (% of ATR) |
|---|---|---|---|---|---|
| DJ-FXCM Dollar Index | 11782.96 | 11821.32 | 11778.6 | 0.03 | 74.39% |
Chart - Created Using FXCM Marketscope 2.0
- Dow Jones-FXCM U.S. Dollar looks poised to retain the range-bound price action ahead of the Humphrey-Hawkins testimony amid the ongoing string of closes above 11,774.
- Will keep a close eye on the RSI as it threatens the bearish momentum carried over from the previous month; topside break to provide conviction/confirmation for a further advance in USDOLLAR.
- Break & close above 11,826 (61.8% expansion) may spur a more meaningful test of 11,901 (78.6% expansion).
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| Release | GMT | Expected | Actual |
|---|---|---|---|
| Chicago Fed National Activity Index (JAN) | 13:30 | 0.05 | 0.13 |
| Existing Home Sales (JAN) | 15:00 | 4.95M | 4.82M |
| Existing Home Sales (MoM) (JAN) | 15:00 | -1.8% | -4.9% |
| Dallas Fed Manufacturing Activity Index (FEB) | 15:30 | -4.0 | -11.2 |
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--- Written by David Song, Currency Analyst
To contact David, e-mail dsong@dailyfx.com. Follow me on Twitter at @DavidJSong.
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